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V0088-18 18 January 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · actividad económica

Property leasing is an economic activity only if a full-time employee is hired under a labour contract

A query was raised regarding whether hiring a full-time employee to manage rentals allows rental income to be classified as income from economic activities. The DGT ruled that this requirement is only met if the contract is a labour contract and for full-time hours.

The question raised

Whether, once said person is hired, the income derived from the leasing of such real estate may be considered, for the purposes of Personal Income Tax, as income from economic activities.

The DGT's ruling

For the leasing of real estate to constitute an economic activity, it is required to employ at least one person under a full-time employment contract. If the management is outsourced through a service provision contract, this requirement is not met, and the income must be classified as income from real estate capital.

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